Louisiana Medicaid Director Seth Gold’s abrupt cancellation of $6 billion in contracts with Aetna and UnitedHealthcare on December 2, 2025, thrust nearly 488,500 enrollees into uncertainty, forcing mid-holiday insurance switches for one-third of the state’s approximately 1.53 million Medicaid population.
The move, just 12 days after lawmakers approved the 2026 contracts on November 20, caught legislators off-guard through news reports rather than official channels. Families scrambled amid lawsuits, political tensions, and disputes over pharmacy benefit managers, reshaping access to care in a state already strained by health system challenges.
Sudden Termination Unfolds
Gold’s letters nullified UnitedHealthcare’s $4.2 billion contract and Aetna’s $1.8 billion deal, which handled provider payments, pharmacy networks, and claims across Louisiana. The scale marked an unprecedented shift in state history, with Aetna serving 157,800 members and UnitedHealthcare covering 330,700 as of August 2025. Lawmakers and families learned of the decision through media, amplifying the shock during the holiday rush.
Legal Setbacks Ignite Action
The cancellations followed a November 21 court loss in a lawsuit filed by Governor Jeff Landry (as Attorney General in 2022) against OptumRx and UnitedHealthcare over alleged Medicaid overcharges. Just 11 days later, UnitedHealthcare’s contract ended, prompting questions of retaliation amid broader pharmacy middlemen conflicts. Attorney General Liz Murrill had sued CVS Health in June 2025 for unfair competition, deceptive practices, and data misuse via its Caremark, Aetna, and pharmacy arms—issues echoed in UnitedHealthcare’s OptumRx operations. CVS had texted Medicaid patients using prescription data to lobby against HB 358, a bill banning PBM-owned pharmacies that Landry backed but that failed to advance.
Aetna’s Quick Reversal
On December 10, Louisiana reinstated Aetna’s $1.8 billion contract after settling with CVS, leaving UnitedHealthcare as the sole target. Health Secretary Bruce Greenstein noted on December 9 the changes would occur over the next two weeks, spanning Christmas, expressing confidence in execution despite prior testimony showing no forewarning. The rapid pivot highlighted negotiation leverage in ongoing PBM disputes.
Vulnerable Groups in Limbo
UnitedHealthcare’s 330,700 members—the majority of whom are working, in school, or have caregiving responsibilities—face algorithmic reassignment starting January 1, 2026, to AmeriHealth Caritas Louisiana, Healthy Blue, Humana, Louisiana Healthcare Connections, or Aetna Better Health. Each plan absorbs approximately 66,140 enrollees and proportional funding. Among the affected population, children face risk of disruptions in pediatric care and school coordination, while seniors and disabled individuals face potential threats to specialist access, medications, and chronic disease management. Rural areas compound risks with pharmacy shortages and transition costs, compressed into a 17-day window versus the usual 3-6 months. A 90-day voluntary switch period offers limited relief, as provider directories often overstate availability per Kaiser Family Foundation data.
Murrill cited contract violations and noncompliance with state law, including withheld documents, without specifics. UnitedHealthcare affirmed commitment to the transition, valuing its service to over 300,000 members. The algorithm prioritizes family unity and provider continuity via claims history, though mismatched networks could still sever doctor-patient ties.
Ripple Effects and Path Ahead
Providers brace for capacity strains, rural pharmacies for volume drops, and remaining plans for influxes. CVS retains sway through Aetna, tempering reform. This saga underscores Medicaid contracting’s volatility: court defeats, failed legislation like HB 358, and PBM battles converging to disrupt care for the vulnerable. As January 1 nears, the state must navigate reassignment logistics, with families’ health continuity hanging in balance amid unresolved power struggles in Louisiana’s $6 billion managed care system. The outcome will test commitments to seamless transitions and signal future leverage in health policy fights.
Sources
Louisiana Abruptly Cuts Two Medicaid Contracts, Putting Care Options for 488,500 in Limbo. Yahoo News/Louisiana Illuminator, December 9, 2025.
Louisiana Ends Major Medicaid Contract 3 Weeks Before Coverage Starts. KPEL News 96.5, December 8, 2025.
Louisiana Attorney General Sues CVS for Unlawful Practices. Reuters Legal, June 24, 2025.
Louisiana Cuts UnitedHealthcare Medicaid Contract Affecting 330,000 Enrollees. Becker’s Payer, December 9, 2025.
Medicaid Managed Care Network Adequacy & Access: Current Standards and Proposed Changes. Kaiser Family Foundation, August 8, 2025.
LDH Announces Update to Medicaid Managed Care Contract Renewals for 2026. Louisiana Department of Health Official Announcement, December 11, 2025.